In some states, if an employee does not earn enough in tips to meet the minimum wage, the employer has to make up the difference.
Photo: KENA BETANCUR / AFP / Getty Images
An increase in minimum wage of up to $ 15 per hour it could provoke a new wave of layoffs in the restaurant sector and maybe even a price increase, according to the opinion of some members of the restaurant sector.
Today, waiters in a state like Indiana earn $ 2.13 per hour, which is more than $ 5 less than the federal minimum wage of $ 7.25, because waiters’ pay also includes tips. If an employee does not earn enough in tips to meet the minimum wage, the employer has to make up the difference.
Those who oppose a higher minimum wage They fear the tax break for restaurants will be removed. Businesses enjoy tax relief because it allows them to count an employee’s tip towards their own salary. If the prices of the menus go up, owners fear fewer people will be dining out, which would cause layoffs and new closures.
Heather Boushey, a member of the White House Council of Economic Advisers, said a higher minimum wage would circulate more money for the economy, increasing the purchasing power of all workers at the bottom of the country’s wage scale.
“When the minimum wage is increased, the amount of money that people have increases and can spend in your community, improves the common income of families, the income of workers, and at the same time, we have not seen great effects on employment, “Boushey told Fox 59 News.
However, this change in salary will likely force the loss of more than a million jobs, mainly in the restaurant sector that has been hit hard during the pandemic, according to the opinion of some restaurant owners.
Earlier this month, the Congressional Budget Office estimated that while raising the minimum wage to $ 15 by 2025 would increase the salary of 17 million workers And lift 900,000 out of poverty, but it would also end 1.4 million jobsas employers would cut jobs to offset higher labor costs, according to a news agency report The Associated Press.
However, some economists have concluded that “the impact on employment, positive or negative, would be minimal, while the social benefits by raising the real wages of lower-income workers and taking millions of people out of work. poverty are substantial, ”the AP noted.
Economists claim that an increase in the minimum wage it would also help reduce the chronic economic gap that exists between white Americans and black and Hispanic.
Proponents of a higher minimum wage argue that the increase at the bottom of the pay scale would help alleviate income inequality, including racial disparities in income.
Critics, on the other hand, they say the time is not right to raise the minimum wage, as many of the businesses most likely to pay minimum wage to their employees have been the most affected by the coronavirus pandemic, including restaurants, hotels and cinemas.
Many restaurant owners hope that President Joe Biden’s proposal to raise the minimum wage to $ 15 will pass in the House of Representatives, they do not expect it to pass in the Senate.
The last time the federal minimum wage increased was in 2009 and reached up to $ 7.25 current dollars, which would be about $ 8.80 in 2021 if you adjust for inflation.
So far, twenty-nine states and Washington, DC, have implemented a minimum wage increase since January 1.
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Eddie is an Australian news reporter with over 9 years in the industry and has published on Forbes and tech crunch.